EU warns Trump over prospect of trade war

Amid suggestions from President Donald Trump that he objects to current trade deals between the EU and the US, and heavy hints that there might be changes, the EU has responded by warning of a trade war.

In an interview with ITV, Trump said he had "a lot of problems with the European Union", and that this contention "may morph into something very big [...] from a trade standpoint."

This follows his recent decision to impose tariffs on US imports of solar panels and washing machines, and the threat of doing the same to imports of steel and aluminium, ostensibly to boost domestic manufacturing.

"The European Union stands ready to react swiftly and appropriately in case our exports are affected by any restrictive trade measures from the United States," said Margaritis Schinas, chief spokesperson of the European Commission, the legislative arm of the EU.

Trump has enacted protectionist, "America First" policies since the very beginning of his presidency. His first executive order, one year ago, was to withdraw from negotiations for the Trans-Pacific Partnership.

This is in stark contrast to the EU's pro-globalisation stance, which it has sought to emphasise in the wake of Brexit. The European bloc recently made free-trade deals with Canada and Japan, is negotiating with Latin America, and has upcoming talks with Australia and New Zealand.

(Source: Bloomberg)